United Airlines has a new ‘cash and points’ option for using miles to reduce the price of a ticket. It is not a good deal, and not a good use of miles. This began with a soft launch in August.
This new revenue-based redemption option uses miles at 1 cent apiece to pay down the cost of airfare. It sure seems like everything old is new again. In 2006 United introduced the ‘Choices’ program letting members use miles earned with a cobrand credit card at one cent against paid fares. This was their response to Capital One ads suggesting airline miles could never be used, and they limited it to miles earned by credit card as a result.
It was a bad deal then, and it’s a bad deal now that they’ve opened the idea up to miles earned from any source. It’s no longer a response to a competitor bank’s advertising, just a poor way to use miles, and actually more restrictive in some ways.
You’re not allowed to use more than 90% of the miles in your account, or redeem miles for more than half the cost of a ticket.
The only upside is that these are paid tickets you’re buying so they’ll earn miles and elite qualifying credit on the cash portion of the fare. (However these tickets can’t be credited to a Star Alliance partner program.)
If you’re redeeming your miles this way you shouldn’t be intentionally accruing United miles. Why not get a 2% cash back card, for instance, use the cash earned to buy tickets on United or another airline? And if you aren’t earning United elite status, credit your United flights elsewhere and redeem at greater value.
However if you’re flying United and redeeming to travel on United no matter what, and United is offering less than a cent per mile for a traditional redemption then this is better than that. The sad thing though is that they’ve spent money on the IT infrastructure to support this, and spent money marketing it.
(HT: Zach Griff)